Ivanhoe Company must decide whether to make or buy some of its components. The costs of producing 67,900 switches for its generators are as follows. Direct materials Direct labor $29,400 Variable overhead $42,526 (a) Fixed overhead Instead of making the switches at an average cost of $2.94 ($199,626 67,900), the company has an opportunity to buy the switches at $2.68 per unit. If the company purchases the switches, all the variable costs and one-fourth of the fixed costs will be eliminated. Your Answer Correct Answer Your answer is correct. $45,300 $82,400

Wilma Company will incur $ of additional costs if it the switches. Would your answer be different if the released productive capacity will generate additional income of $47,816 ? (Enter negative amounts using either a negative sign preceding the number eg. -45 or porentheses es (45).) Ivanhoe Company must decide whether to make or buy some of its components. The costs of producing 67,900 switches for its generators are as follows. Instead of making the switches at an average cost of $2.94($199,626+67,900), the company has an opportunity to buy the switches at $2.68 per unit. If the company purchases the switches, all the variable costs and one-fourth of the fixed costs will be eliminated. (a)